DAILY MORNING NOTE | 14 December 2023

**Do note that the last day of Morning Note Issuance will be on 15 December 2023. Morning Note will resume in January 2024**

Singapore shares edged up on Wednesday (Dec 13) amid mixed showing from regional indices.The index rose 0.1 per cent or 1.95 points to 3,104.26. Across the broader market, decliners outnumbered advancers 282 to 244. Around one billion securities worth S$772.9 million changed hands.

Fed kept its key lending rate between 5.25 per cent and 5.50 per cent, maintaining a 22-year high for the third straight meeting due to inflation. Dow Jones Industrial Average surged 1.4 per cent on Wednesday to finish above 37,000 points for the first time, after the Federal Reserve signaled it expects interest rate cuts in 2024. The broad-based S&P 500 also climbed 1.4 per cent to 4,707.09, along with the tech-rich Nasdaq Composite Index, which finished at 14,733.96.

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***We are ceasing coverage of iX Biopharma with immediate effect due to a reallocation of resources. The previous recommendation can no longer be relied upon.***


India-based business-to-business (B2B) fruits marketplace Vegrow has bagged US$46 million in primary and secondary funding in a Series C funding round led by GIC. Existing investors Prosus Ventures, Matrix Partners India, Elevation Capital and Lightspeed also participated in the round.

Asian Development Bank (ADB) expects South-east Asia’s gross domestic product (GDP) to grow 4.3 per cent this year, down from its September Forecast of 4.6 per cent. September’s forecast was also a downgrade from April’s prediction of 4.7 per cent.

Singapore’s accounting industry body is putting S$15 million towards new initiatives to increase the supply of chartered accountants, including a new training centre.The Institute of Singapore Chartered Accountants (Isca) has budgeted this amount for the next three years to administer the Singapore Chartered Accountant Qualification (SCAQ) programme and set up the new centre.


Mubadala Investment and Ares Management will partner with Aldar Properties on a US$1 billion private credit fund to invest in real estate across the UK and Europe. Mubadala will hold a 50 per cent stake in the new platform, while Aldar will have a 30 per cent holding, according to a statement. Ares will own the remaining 20 per cent and it will provide an investment team to manage deal origination and monitor the portfolio.

Private equity firm Bain Capital has sold a stake worth US$448 million in Indian private lender Axis Bank in a block trade on Wednesday (Dec 13).Bain affiliates BC Asia Investments VII, BC Asia Investments III and Integral Investments South Asia IV were offering 33.4 million shares, or a 1.1 per cent stake in Axis Bank, at 1,119.70 rupees per share, the term sheet showed.

Pfizer on Wednesday (Dec 13) forecast 2024 revenue and profit below Wall Street expectations, sending its shares down 6 per cent in pre-market trading even as it raised cost-cut target by US$500 million.

Vacation rental platform Airbnb said on Wednesday (Dec 13) it will pay 576 million euros (S$834.6 million) to the Italian Revenue Agency to settle outstanding host income tax obligations for the 2017-2021 tax years.

Tesla filed a recall covering more than two million vehicles after the top US auto-safety regulator determined its driver-assistance system Autopilot system doesn’t do enough to prevent misuse.

Wework, the embattled co-working giant navigating a bankruptcy, is keeping a Manhattan office spot largely leased to Amazon.com through a deal that includes reduced rent and a shortened lease term.

In a bid to attract developers to build on its artificial intelligence platform, Alphabet on Wednesday (Dec 13) said it was making a version of its most advanced model available to developers immediately, as well as reducing costs.

Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR


LHN Ltd – Co-living revenue doubles

Recommendation: BUY (Maintained); Last Done: S$0.325 TP: S$0.39; Analyst: Paul Chew

– 2023 revenue was within expectations, but earnings were below expectations. Revenue and adjusted PATMI were 98%/90% of our FY23e forecasts (excluding logistics). 2H23 adjusted PBT was 5% YoY lower due to reduced sublease gains in the commercial segment.

– Co-living revenue and earnings jumped an estimated 115% and 97% YoY, respectively in 2H23. A special dividend of 1 cent was announced from the S$18.1mn gain from the disposal of LHN Logistics. Bulk of the proceeds will be redeployed to expand the co-living franchise in Singapore with a target of 800 keys p.a. for three years (or 30% CAGR).

– We lower our FY24e earnings by 24% following the disposal of LHN Logistics. Consequently, our target price is reduced from S$0.47 to S$0.39. We peg our valuations to 6.5x FY24e P/E, while the industry is trading around 13x. Growth for LHN in FY24e will be driven by the Coliwoo expansion of 347 keys in the pipeline in Singapore and potential overseas expansion. FY25e earnings will be supported by a food factory development project worth an estimated S$70mn. We maintain BUY. LHN is scaling up its co-living franchise and brand name in Singapore. The stock pays a dividend yield of 6%, and trades at a 39% discount-to-book value of S$0.53.

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